The Morning Call---Inflation and recession are stoking investor confusion

 

The Morning Call

 

4/28/23

 

 

 

The Market

         

    Technical

 

Thursday in the charts.

https://www.zerohedge.com/markets/bonds-vix-dumped-bitcoin-stocks-pumped-stagflation-signals-soar

 

Three other charts worth watching.

https://www.zerohedge.com/the-market-ear/three-charts-we-are-watching

 

The fragile rally.

https://www.ft.com/content/b760c871-6812-4409-ba76-1e4a67f8b7e7

 

The four most concerning trends in the Market.

https://www.zerohedge.com/markets/jpm-delta-one-these-are-four-most-concerning-trends-todays-market-and-how-trade-them

 

The world is not dumping dollars.

https://www.reuters.com/markets/asia/world-is-not-dumping-its-dollars-2023-04-26/?utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=255918425&_hsenc=p2ANqtz--eEWXuOTaN8Omii1LllmGPotOHh3V3BfNWqAbxrOlI_QQ113Barrbe7uyUTTuEWQL-NReacRzX5gB0HbVPFThvAN--1A&utm_content=255918425&utm_source=hs_email

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

                           

March personal income rose 0.3% versus expectations of +0.2%; March personal spending was flat versus -0.1%; the PCE price index was +0.1% versus +0.3%; the core PCE price index was +0.3%, in line.

 

                            March pending home sales fell 5.3% versus forecasts of +0.5%.

                            https://www.advisorperspectives.com/dshort/updates/2023/04/27/pending-home-sales-unexpectedly-drop-5-2-in-march

 

The April Kansas City Fed manufacturing index came in at 21 versus predictions of +3.

 

                        International

                            

The March Japanese unemployment rate was 2.8% versus consensus of 2.5%; March industrial production was +0.8% versus +0.5%; March retail sales were +0.6% versus -0.6%; March YoY housing starts were -3.2% versus -4.3%; March YoY construction orders were -4.1% versus +10.0%; April YoY CPI was +3.5% versus +3.1%; April YoY core CPI was +3.5% versus +3.2%.

 

Q1 flash German GDP growth was 0.0% versus projections of +0.2%; April CPI was +0.4% versus +0.6%; the April unemployment rate was 5.6% in line.

 

Q1 flash EU GDP growth was +0.1% versus forecasts of +0.2%.

 

                        Other

 

The impact of inflation and rising interest rates on the median home mortgage payment.

https://politicalcalculations.blogspot.com/2023/04/inflation-interest-rates-and-median-new.html#.ZEq2KXbMLSw

 

            The Fed

 

              Uncertainty inside the Fed.

  https://www.bloomberg.com/news/articles/2023-04-27/powell-faces-pushback-inside-fed-over-need-to-cool-wage-gains?srnd=premium&leadSource=uverify%20wall&sref=loFkkPMQ

 

 

            Fiscal Policy

 

              Biden’s new mortgage plan---punishes those who pay their bills on time.

              https://jeffjacoby.com/26926/your-credit-score-is-excellent-so-prepare-to-be

 

            Recession

 

              The Godot recession.

              https://econbrowser.com/archives/2023/04/the-godot-recession-2

 

              Best guess on recession start date.

              https://econbrowser.com/archives/2023/04/best-guess-on-recession-start

 

              What happened to those housing doom predictions?

              https://www.advisorperspectives.com/commentaries/2023/04/27/how-bout-those-housing-doom-predictions

 

 

            The Banking System

 

              Banking problems may be the tip of the debt iceberg.

              https://www.wsj.com/articles/banking-problems-may-be-tip-of-debt-iceberg-262b6d0e?mod=economy_lead_pos3

 

    Bottom line

 

            Inflation and recession are stoking investor confusion.

https://www.reuters.com/markets/asia/world-is-not-dumping-its-dollars-2023-04-.26/?utm_campaign=What%20I%20Am%20Reading&utm_medium=email&_hsmi=255918425&_hsenc=p2ANqtz--eEWXuOTaN8Omii1LllmGPotOHh3V3BfNWqAbxrOlI_QQ113Barrbe7uyUTTuEWQL-NReacRzX5gB0HbVPFThvAN--1A&utm_content=255918425&utm_source=hs_email

 

    News on Stocks in Our Portfolios

 

Exxon Mobil press release (NYSE:XOM): Q1 Non-GAAP EPS of $2.83 beats bt $.23by $0.23. Revenue of $86.56B (-4.4% Y/Y) misses by $3.51B.

 

What I am reading today

 

           

 

 

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The Morning Call--M2 growth is slowing significantly

The Morning Call

 

4/27/23

 

The Market

         

    Technical

 

            Wednesday in the charts.

             https://www.zerohedge.com/markets/big-tech-bitcoin-jump-bonds-bank-stocks-dump-us-default-risk-soars

 

            Breadth continues to narrow.

            https://www.zerohedge.com/markets/verge-collapse-market-breadth-weakest-ever-stock-leadership-narrowest-record

 

            Buybacks waning

            https://www.zerohedge.com/the-market-ear/buybacks-waning

 

            Sell in May?

https://realinvestmentadvice.com/sell-may-in-april-and-go-away/?utm_medium=email&utm_campaign=Tuesday%20Takes%20Sell%20May%20In%20April%20And%20Go%20Away&utm_content=Tuesday%20Takes%20Sell%20May%20In%20April%20And%20Go%20Away+CID_499b91e117cea2c16c852553821f6121&utm_source=RIA%20Email%20Marketing%20Software&utm_term=READ%20MORE

           

            Druckenmiller short the dollar.

            https://www.zerohedge.com/markets/druckenmillers-only-high-conviction-trade-short-weaponized-dollar

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

The initial estimate of Q1 GDP growth was 1.1% versus expectations of 2.0%; the price index was 4.0% versus 3.7%; real consumer spending was 3.7% versus 0.7%.     

                    

                         April initial jobless claims totaled 236,000 versus estimates of 248,000.   

 

                        International

                         

The February Japanese leading economic indicators were reported at 98.0 versus predictions of 97.7. 

 

The April EU economic sentiment index was 99.3 versus consensus of 99.9; the industrial sentiment index was -2.6 versus +0.1; the services sentiment index was 10.5 versus 9.4; consumer confidence was -17.5 versus -17.9.

                      

                       Other

                     

                        Update on housing sales and prices.

                        https://politicalcalculations.blogspot.com/2023/04/upward-momentum-for-us-new-home-market.html#.ZElcenbMLSw

 

            The Fed

 

M2 growth is slowing significantly (must read). As an aside, a shrinking money supply (i.e., liquidity) may be good for inflation but it is not good for stocks

              http://scottgrannis.blogspot.com/2023/04/m2-update-return-to-normal-by-year-end.html

 

            Fiscal Policy

 

              More government interference in product innovation.

              https://www.realclearmarkets.com/articles/2023/04/26/offense_is_required_to_contend_with_china_not_authoritarian_defense_895778.html

 

            Recession

 

               So far the fallout from the banking crisis has been limited.

               https://www.cnbc.com/2023/04/25/the-banking-crisis-is-having-a-slow-burn-impact-on-the-economy.html

 

               Serious mortgage delinquency declined in March.

               https://www.calculatedriskblog.com/2023/04/freddie-mac-mortgage-serious.html

 

               Commodity bell weather signaling recession.

               https://www.zerohedge.com/markets/commodities-bellwether-flashes-us-recession-warning

 

            The Debt Ceiling

 

              House republicans appear have reached an agreement on a debt limit bill.

              https://www.zerohedge.com/political/there-appears-be-deal-mccarthy-makes-late-night-concessions-48-trillion-debt-limit

 

              Unexpected last-minute jump in tax receipts.

              https://www.zerohedge.com/markets/unexpected-last-minute-jump-tax-receipts-gives-us-1-month-delay-until-debt-ceiling-crisis

 

            The Banking System

 

              The problems aren’t over.

              https://www.bloomberg.com/news/articles/2023-04-25/first-republic-said-to-weigh-up-to-100-billion-in-asset-sales?sref=loFkkPMQ

 

    Bottom line.

 

            Be careful who you listen to.

            https://www.safalniveshak.com/influencers-are-not-the-problem/

 

    News on Stocks in Our Portfolios

 

C.H. Robinson Worldwide press release (NASDAQ:CHRW): Q1 Non-GAAP EPS of $0.98 in-line.

Revenue of $4.6B (-32.4% Y/Y) misses by $200M.

 

AbbVie press release (NYSE:ABBV): Q1 Non-GAAP EPS of $2.46 misses by $0.03.

Revenue of $12.23B (-9.7% Y/Y) in-line.

 

Mastercard press release (NYSE:MA): Q1 Non-GAAP EPS of $2.80 beats by $0.09.

Revenue of $5.7B (+9.6% Y/Y) beats by $60M.

 

Altria press release (NYSE:MO): Q1 Non-GAAP EPS of $1.18 beats by $0.01.

Revenue of $4.76B (-1.2% Y/Y) misses by $130M.

           

What I am reading today

 

           

 

 

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.

 

 

 

The Morning Call--The debt ceiling is not the problem

 

The Morning Call

 

4/26/23

 

The Market

         

    Technical

                       

            Tuesday in the charts.

             https://www.zerohedge.com/markets/zombie-banks-soaring-usa-risk-spark-plunge-stocks-bond-yields

 

            The trend is still up.

            https://allstarcharts.com/why-are-investors-so-scared/

 

            Or not.

            https://www.zerohedge.com/markets/i-am-tactically-bearish-goldmans-flows-guru-warns-things-have-changed-today

 

                Market leadership narrowing.

            https://www.zerohedge.com/the-market-ear/crowding-mania

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

  Weekly mortgage applications were up 3.7% while purchase applications were up 4.6%.

                                   

                          March new home sales rose 9.6% versus predictions of +1.1%.

                          https://www.advisorperspectives.com/dshort/updates/2023/04/25/new-home-sales-surge-9-6-in-march

 

   March durable goods orders rose 3.2% versus consensus of +0.7%; ex transportation, they were up 0.3% versus -0.2%.

 

                          April consumer confidence came in at 101.3 versus expectations of 104.0.

                          https://www.advisorperspectives.com/dshort/updates/2023/04/25/consumer-confidence-declined-in-april

                                       

  The April Richmond Fed manufacturing index was -10    versus estimates of +2.

                          https://www.advisorperspectives.com/dshort/updates/2023/04/25/richmond-fed-manufacturing-activity-deteriorated-in-april

                                                           

                        International

 

May German consumer confidence was reported at -25.7 versus projections of -27.9.

 

                        Other

 

                          The latest Q1 GDP nowcasts.

                          https://www.capitalspectator.com/moderate-growth-expected-for-thursdays-us-q1-gdp-report/#more-20064

 

              The global economy’s slow-motion reset.

              https://www.axios.com/2023/04/21/global-economy-slow-reset

 

Recession

 

  Diesel prices signal warning for the US economy.

  https://www.wsj.com/articles/sliding-diesel-prices-signal-warning-for-u-s-economy-c6400724?mod=economy_lead_story

 

  Commercial real estate woes run deeper than in past downturns.

  https://www.wsj.com/articles/commercial-real-estate-woes-run-deeper-than-in-past-downturns-e0c1f2b3?mod=economy_lead_pos3

 

The Debt Ceiling

 

  The debt ceiling is not the problem.

  https://thehill.com/opinion/finance/3966227-the-debt-ceiling-is-the-least-of-our-nations-fiscal-concerns/

           

  Bond market sounds the alarm over the debt ceiling negotiations.

              https://www.axios.com/2023/04/25/bond-market-alarm-debt-ceiling-negotiations

 

     Bottom line

 

            Parsing the economic and market outlook.

            https://alhambrapartners.com/2023/04/24/weekly-market-pulse-this-too-shall-pass/

 

            With all that cash, can’t Buffett find something to buy?

            https://www.zerohedge.com/markets/buffetts-berkshire-awash-cash-cant-find-much-buy

 

    News on Stocks in Our Portfolios

 

Automatic Data Processing press release (NASDAQ:ADP): Q3 Non-GAAP EPS of $2.52 beats by $0.08.

Revenue of $4.9B (+8.9% Y/Y) beats by $20M.

 

General Dynamics press release (NYSE:GD): Q1 GAAP EPS of $2.64 beats by $0.06.

Revenue of $9.9B (+5.3% Y/Y) beats by $600M.

 

What I am reading today

 

            Quote of the day.

            https://cafehayek.com/2023/04/quotation-of-the-day-4248.h

 

            Compared to what?

            https://www.adamsmith.org/blog/to-repeat-mr-sowells-question-compared-to-what

 

 

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.